Conford, Freund and Kilkenny. The opinion of the court was delivered by Conford, S.j.a.d.
[64 NJSuper Page 468] Plaintiff corporation sued to recover $79,000 allegedly due from Kruvant Enterprises Co. ("Kruvant" hereinafter) as the unpaid balance due on a sale of real estate in West Orange. The material defenses specified by the pretrial order were discharge by novation and discharge by accord and satisfaction. Judge Schechter, sitting in the Law Division without a jury, heard the case, which
was submitted entirely on documentary evidence and stipulations of fact, and without oral testimony. He decided in favor of the defendant on the ground of novation of the agreement sued on by a later one entered into by plaintiff with Empire Holding Company ("Empire" hereinafter). The officers and directors of Kruvant and Empire are identical, being Norman B. Kruvant, Philip Kruvant and Charles Kruvant.
The material facts are as follows. On October 29, 1955 plaintiff and Kruvant modified an earlier agreement of sale to the latter of certain vacant land in West Orange so as to agree on a purchase price of $158,000, payable $79,000, in part by deposit forthwith and the remainder on closing, set for January 2, 1956, and the balance of $79,000 on a fixed condition. This was: "* * * if and only in the event that within three (3) years from the date hereof, the governing body of the Town of West Orange has enacted an ordinance changing the zoning requirements covering said premises, to any classification other than that which now applies thereto." It was further agreed that plaintiff's attorneys, Messrs. Van Riper and Belmont, should at Kruvant's expense continue efforts already initiated to secure a zoning change. At the time, the property was in a residential zone district.
On December 29, 1955 the Kruvant board of directors authorized, and there was executed, an assignment of its interest in the contract to Empire, reciting that it was "subject to all terms and conditions therein stated." On December 30, 1955 the Empire board of directors resolved to purchase the contract, subject to all rights, conditions and obligations therein, and authorized its consummation. The same day title was closed between plaintiff and Empire by the delivery of deeds for the property and payment by Empire of the balance of the $79,000 then due. Empire executed and delivered at the closing to plaintiff a letter agreement approved in writing by the latter, in which the $79,000 contingent liability was dealt with as follows:
"Mayfair Farms Holding Corp.
There having been delivered to the undersigned this date, deeds from you in accordance with the Article of Agreement dated March 26, 1955, as amended October 29, 1955, between you and our assignee [inadvertent -- means 'assignor'], Kruvant Enterprises, this instrument acknowledges and declares that all obligations under said agreements have been performed by the parties, except the following obligations of the undersigned, which obligations the undersigned acknowledges and declares have survived and do survive the delivery of said deeds, to wit: --
1. In the event that within three years from October 29, 1955, the governing body of the Town of West Orange shall have enacted an ordinance which shall permit but not require the use of the properties described in said deeds for all the purposes now designated in existing zoning ordinance of said Town as classification R-G, R-M, BI, I2 and N-RS, then the undersigned agrees to pay you $79,000.00 within one year following the date when said ordinance becomes legally effective; that is, time for all review has expired or if review is taken by referendum or legal proceedings, or both, all such proceedings have resulted in sustaining the validity of said ordinance.
No obligation to pay said sum shall exist if said ordinance, as amended, limits or restricts the use of the properties described in said deeds to purposes prohibited by the restrictions contained in said deeds.
2. The undersigned further agrees that Van Riper and Belmont, Esqs., your attorneys, shall, at the expense of the undersigned, continue efforts already initiated to secure such zoning changes and the undersigned agree to render its full aid and assistance in furtherance of such application when and as required by such counsel.
3. At the end of eighteen months from October 29, 1955, the undersigned shall have the option to discontinue further efforts to procure such re-zoning provided, however, that if, at that time, an ordinance has already been enacted but either through referendum proceedings or legal proceedings, or both, the validity thereof is under review then the right to discontinue such efforts shall not accrue until such proceedings have finally terminated.
4. If efforts to effect such re-zoning are discontinued but nevertheless, as a result of new applications such re-zoning becomes so legally effective within three years from October 29, 1955, then, and in that event, and upon such re-zoning becoming so legally effective, the undersigned will pay to you the said sum of $79,000 within one year thereafter.
5. The undersigned shall have the right, at any time, subsequent to the date hereof, to anticipate the payment of said sum.